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Editorial

Watts Sector Focus Bulletin - Local Authorities

With estimated annual running costs of £25 billion for the central Government estate alone, the vastpublic sector property portfolio is under fierce scrutiny in the new climate of government austerity. Estates Directors are under pressure as never before to screw down costs and gain maximum benefit from their assets. In the following pages we look at some of the key challenges and opportunities facing local authorities as they grapple with the realities of tighter funding and we ask whether there are valuable lessons to be learned from the private sector, with its culture of lean, strategic property solutions and hard hitting approach to asset disposal and investment.

Watts Sector Focus Bulletin - Local Authorities

What next for school buildings?

Councils have spent at least £160 million on preparation and paperwork for school rebuilding projects which have now been cancelled, according to the Local Government Association. So where do we go from here?

In July, Education secretary Michael Gove axed the Labour Government’s ambitious Building Schools for the Future (BSF) programme, cutting 700 school projects around the country and putting 123 new academies on hold.

In a snapshot survey of 67 authorities, the Local Government Association (LGA) found they had spent more than £161,448,000 preparing for rebuilding programmes which have now been cancelled. The BSF scheme required councils to carry out detailed public consultation to recruit and commission designers and architects ahead of programmes being given the final go-ahead. They also had to carry out extensive preparatory work comprising 60 separate documents, strategic overviews and project boards in order to submit proposals for funding. Local Government leaders are now calling for this work and any architectural plans drawn up under BSF to be eligible for consideration under any new programme to share out capital funding.

Speaking on 5 July, the Education Secretary announced a new approach to school buildings, aimed at achieving the best value for money from capital budgets. He pledged that 706 new schools will be opened under the new arrangements, of which nearly 386 are projected to be new-build; 262 are to be remodelled or refurbished; and 26 are to be ICT-only. The building programme in 32 further schools is yet to be confirmed. He also announced that the Department of Education is reducing its End Year Flexibility requirements by £1 billion to help ensure no additional borrowing this year. An estimated £156.5 million savings will be made from capital budgets where commitments are no longer affordable. The £972,000 annual funding for the Commission for Architecture and the Built Environment (CABE) design advice service associated with the BSF programme, has also been scrapped leaving authorities and the construction industry in doubt as to the quality threshold that will be applied to any schools built in future.

The Government is to launch a comprehensive review of all capital investment in schools, early years, colleges and sixth forms, which is expected to report to its findings by the end of the year and will guide decision-making over the next spending review period from 2011/12 to 2014/15.

For more information contact Mark Few in Watts' Public Sector team on: 020 7280 8000.